Stocks Could Jump 15% in 3 Months

The Nasdaq Composite Index has just seen a rare event, so rare, it has occurred less than 1% of the time since 1971 and only twice in the current bull market.

Most recently seen in February 2015 and 2009, history shows that this anomaly is likely to lead to big returns. DailyWealth’s Brett Eversole predicts, this event could lead to a sharemarket increase of around 15% over the next three months.

What’s the Event?

According to Stansberry Research analyst, Dr Steve Sjuggerud, the biggest gains come towards the end of a bull market. This is the next leg up in his “Melt Up” thesis. According to Dr Sjuggerud, “The greatest increase will occur in the last few innings, as the market “Melts Up” before undergoing a large “Melt Down”. This is what is currently occurring in the US, as we are coming towards the end of a historic bull market.

As shown in the chart below, Dr Sjuggerud believes the US is in the middle of a current bull market “Melt Up” and this lead the Nasdaq to rise higher for 10 straight trading days, from 7th July to 20th July.

According to his research, this is a rare event and indicates the boom is not over.

Nasdaq Composite Index

His basic “Melt Up” thesis states, that after an unexpected improvement in the Nasdaq index, stocks will continue to rise, and this rare string of consecutive up days is further evidence that stocks still have further room to go higher.

The table below shows the returns generated by similar extremes since 1971, when buying stocks after the Nasdaq Composite Index has jumped 10 days in a row. Therefore, if the current “Melt Up” follows history, as Dr Sjuggerud predicts, then investing now, compared to normal periods, would mean that the Nasdaq has the potential to rise 14.6% over the next 3 months.

Comparing returns generated between exteme and all periods

The current market uptrend is strong and with the current prediction of substantially higher gains, investing now could generate significant outperformance.

United Global Capital specialise in designing financial strategies and finding investment opportunities that maximise returns whilst minimising risk for Australians in every phase of life. Contact United Global Capital today for a no cost, no obligation consultation on 03 8657 7640 or email [email protected] to learn more.

The information contained in this article is General in nature and has been prepared without taking into account your objectives, financial situation and needs. When assessing any investment you should also consider that past performance is not a reliable indicator of future performance.

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